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Vol. 137, No. 43 — October 25, 2003 Regulations Amending the Certification of Origin of Goods Exported to a Free Trade Partner RegulationsStatutory Authority Customs Act Sponsoring Agency Canada Customs and Revenue Agency REGULATORY IMPACT NOTICE Under its terms, the Canada-Costa Rica Free Trade Agreement (CCRFTA) came into effect on November 1, 2002. Description The Canada-Costa Rica Free Trade Agreement Implementation Act, which gives effect to the CCRFTA signed by Canada and Costa Rica on April 23, 2001, resulted in the introduction of new provisions and amendments to existing provisions in the Customs Act and the Customs Tariff. These changes have resulted in the introduction of amendments to existing regulations under the Customs Act and the Customs Tariff, as well as a new regulatory instrument made under the Customs Act. The following regulations are being amended to reflect the new CCRFTA provisions of the Customs Act and to implement commitments made by Canada in that Agreement: Regulations Amending the Certification of Origin of Goods Exported to a Free Trade Partner Regulations These amending Regulations cover Canada's obligations under Article V.1 of the CCRFTA, while retaining the obligations under Article 501 of the North American Free Trade Agreement (NAFTA), Article E-01 of the Canada-Chile Free Trade Agreement (CCFTA) and Article 5.1 of the Canada-Israel Free Trade Agreement (CIFTA). They set out the basic criteria for Canadian exporters to complete Certificates of Origin under the provisions of a free trade agreement. Regulations Amending the Exporters' and Producers' Records Regulations These Regulations implement Canada's obligations pertaining to exporters' records under Article V.5 of the CCRFTA, while retaining the existing obligations under the provisions of Article 505 of the NAFTA, Article E-05 of the CCFTA and Article 5.5 of the CIFTA. The Regulations describe the types of records that must be retained by Canadian exporters and Canadian producers who sign Certificates of Origin, and also permit these records to be retained on computer-readable media. The general retention period of six years also applies to records related to the CCRFTA. Regulations Amending the Free Trade Agreement Advance Rulings Regulations These Regulations serve to maintain Canada's obligations under Article 509 of the NAFTA, Article E-09 of the CCFTA and Article 5.8 of the CIFTA, while extending the Canada Customs and Revenue Agency (CCRA) advance rulings program respecting originating goods to Canadian importers of goods from Costa Rica, as well as to exporters and producers in Costa Rica. This change is needed to implement Article V.9 of the CCRFTA. The availability of advance rulings provides greater certainty to traders inside and outside Canada with respect to the eligibility of their goods for preferential tariff treatment under a free trade agreement. In addition, section 8 of the Regulations is being amended in order to address an issue specific to the CCRFTA. When an advance ruling is issued concerning goods imported from Costa Rica, an officer shall provide to the person who requested the ruling a full explanation of the reasons for the ruling, whether that ruling was favourable or unfavourable. This is different from the NAFTA and CCFTA, which allow for an explanation to be provided for an advance ruling only when that ruling is unfavourable. Regulations Amending the Imported Goods Records Regulations These Regulations serve to implement Canada's obligations under Article V.5 of the CCRFTA, while retaining the obligations under Article 505 of the NAFTA, and Article E-05 of the CCFTA. Sections 7 and 8 now extend to those commercial importers enjoying the benefit of the preferential tariff treatment under the CCRFTA the obligation to maintain proper books and records and to produce them for inspection by CCRA officials upon request. Any commercial importer who fails to meet these obligations risks the loss of the preferential tariff treatment under the CCRFTA for goods exported from Costa Rica. These obligations already apply to importers of goods entitled to the preferential tariff treatment under the NAFTA and CCFTA. Regulations Amending the Refund of Duties Regulations These Regulations implement Canada's obligations under Article V.2 of the CCRFTA, while maintaining the existing obligations under Article 502 of the NAFTA, Article E-02 of the CCFTA and Article 5.2 of the CIFTA. The Regulations allow importers to take advantage of the refund provisions of the Customs Act in situations where preferential tariff treatment under a free trade agreement was not claimed at the time of accounting because of the absence of a valid Certificate of Origin. Regulations Amending the Tariff Item Nos. 9971.00.00 and 9992.00.00 Accounting Regulations These Regulations have added references to Costa Rica in order to implement Canada's obligations under Article III.6 of the CCRFTA. These Regulations outline the documentary requirements for goods that are returned to Canada after having been exported to the United States, Mexico, Chile, Costa Rica or Israel or another CIFTA beneficiary for repair or alteration. The following Regulations are being amended to reflect the new CCRFTA provisions of the Customs Act and Customs Tariff and to implement commitments made by Canada in that Agreement: Regulations Amending the Temporary Importation (Tariff Item No. 9993.00.00) Regulations These Regulations implement Canada's obligations under Article III.4 of the CCRFTA, while maintaining the existing obligations under Article 305 of the NAFTA and Article C-04 of the CCFTA. They describe the conditions under which goods may be imported on a temporary basis without the payment of applicable customs duties under tariff item No. 9993.00.00. The following is a new regulation that has been designed solely as a result of the CCRFTA: CCRFTA Verification of Origin Regulations These Regulations implement Canada's obligations under Article V.6 of the CCRFTA. These Regulations describe the process to be followed by Canadian officials to verify claims for preferential tariff treatment under the CCRFTA. Such activities may include sending a letter or questionnaire to the exporter or producer of the goods or may take the form of a verification visit. Alternatives These regulations serve to implement Canada's obligations under the CCRFTA. There is no practical alternative to proceeding with them. Benefits and Costs The CCRFTA provides Canadian exporters immediate duty-free access for a wide range of Canadian exports to a market of 4 million people. Two-way trade between Canada and Costa Rica was $249 million in 2001. The Agreement is expected to accelerate this trade. There will be no additional costs to importers as a result of these changes as importers already comply with the obligations based on Customs Notices issued by the CCRA on November 1, 2002, and May 12, 2003. Consultation The Government consulted widely with Canadian industry associations and with individual companies during the negotiations of the CCRFTA. A number of consultations were also held with the Sectoral Advisory Groups on International Trade, as well as with the provinces and other interested parties. Compliance and Enforcement CCRA automated systems have been modified to provide monitoring and verification programs to ensure routine compliance and uniformity in the application of CCRA rulings, determinations, policies and procedures. Compliance measures will be taken to ensure the overall administrative integrity of the CCRFTA. Similar to the requirements of the NAFTA, CIFTA and CCFTA, commercial importers claiming CCRFTA benefits will be required to have in their possession CCRFTA Certificates of Origin signed by the exporter of the goods, and will be required to present them to customs for verification on a selective basis. CCRA officials will selectively review accounting documentation and, as provided in the Agreement, verification questionnaires and letters will be sent to exporters and producers, and on-site verification visits and audits will be conducted so as to ensure compliance by exporters and/or producers in Costa Rica. Specific verification activities may be initiated where there is significant risk of revenue loss; where it is unlikely that goods meet the rules of origin; in response to complaints of CCRFTA abuse from the trading community; or in support of Government trade policy initiatives. As required by the CCRFTA, the customs service of each party is putting procedures in place to exchange written notices of information concerning any actual or prospective administrative measures that might affect the operation of the Agreement. This will provide opportunities for predictable and transparent administration by the parties involved. Ms. Tia M. McEwan, Acting Manager, Legislative and Regulatory Development and Liaison Unit, Trade Incentives Programs Division, Trade Policy and Interpretation Directorate, Customs Branch, Canada Customs and Revenue Agency, 150 Isabella Street, 4th Floor, Ottawa, Ontario K1A 0L5, (613) 954-7109 (Telephone), (613) 952-3971 (Facsimile), TiaMaria.McEwan@ccra-adrc.gc.ca (Electronic mail). Notice is hereby given that the Governor in Council, pursuant to subsection 97.1(1) (see footnote a), paragraphs 164(1)(i) (see footnote b) and (j), subsection 164(1.3) (see footnote c) and paragraph 167.1(b) (see footnote d) of the Customs Act (see footnote e), proposes to make the annexed Regulations Amending the Certification of Origin of Goods Exported to a Free Trade Partner Regulations. Interested persons may make representations with respect to the proposed Regulations within 30 days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part I, and the date of publication of this notice, and be addressed to Tia M. McEwan, Acting Manager, Trade Incentives Programs Division, Trade Policy and Interpretation Directorate, Customs Branch, Canada Customs and Revenue Agency, 4th floor, 150 Isabella Street, Ottawa, Ontario K1A 0L5. Persons making representations should identify any of those representations the disclosure of which should be refused under the Access to Information Act, in particular under sections 19 and 20 of that Act, and should indicate the reasons why and the period during which the representations should not be disclosed. They should also identify any representations for which there is a consent to disclosure for the purposes of that Act. Ottawa, October 23, 2003
EILEEN BOYD
REGULATIONS AMENDING THE CERTIFICATION OF ORIGIN OF GOODS EXPORTED TO A FREE TRADE PARTNER REGULATIONS AMENDMENTS 1. Paragraph 2(c) of the Certification of Origin of Goods Exported to a Free Trade Partner Regulations (see footnote 1) is replaced by the following: (c) in the case of goods exported or to be exported from Canada to a NAFTA country, to Chile or to Costa Rica, a certificate, completed and signed by the producer and provided voluntarily to the exporter, stating that the goods meet the applicable rules of origin. 2. Paragraph 3(b) of the Regulations is replaced by the following: (b) in the case of goods exported or to be exported from Canada to Mexico, to Chile or to Costa Rica, in English, French or Spanish; and COMING INTO FORCE 3. These Regulations are deemed to have come into force on November 1, 2002. [43-1-o] S.C. 1997, c. 14, s. 44 S.C.1992, c. 28, s. 30(1) S.C. 2001, c. 28, s. 30 S.C. 1992, c. 28, s. 31(1) R.S., c. 1 (2nd Supp.) SOR/97-332 |
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